Despite an $800 off-contract price tag, Motorola RAZR became hugely popular in 2003. A few years later, the iPhone was launched, but Apple’s smartphone could never catch up to Motorola’s phone. Amazing as it is, the iPhone now outsells the RAZR. Furthermore, iPhone 3G Leads U.S. Consumer Mobile Phone Purchases in the third quarter of 2008. The RAZR has held on to the lead spot for 12 quarters. If looks seemed to do the trick for RAZR, iPhone’s functionality impressed consumers. In a NPD ranking, Apple’s phone is first, Motorola RAZR second and RIM’s (Research in Motion) BlackBerry Curve is third. However, globally, Nokia still hangs on to first place on the smartphone market.

An aspect that gives customers the creeps is the failure rate of RAZR, 18 percent. In addition, Blackberry’s rate is twice that of the iPhone. NPD’s data showed a disturbing fact. Due to the critical economic situation, there has been a slowdown in U.S. phone sales overall. Phone purchases declined 15 percent in the third quarter from the same period last year, and revenue fell 10 percent. It’s unclear whether the iPhone rush will continue, and that’s because mobile phones with QWERTY keyboards saw the greatest year-over-year rise in sales. About 30 percent of handsets sold in the third quarter had those keyboards familiar to computer users, making it very clear that a tactile keyboard is not one of the iPhone’s many assets.

Despite the success over Motorola’s RAZR, analysts say that Apple may cut iPhone production by more than 40 percent in the calendar fourth quarter compared to the third quarter. Furthermore, Apple is estimated to ship around 2 million fewer iPhones in the 4th quarter than it did in the previous one.